Tag: Inflation (Economics)

As Omicron Threat Looms, Inflation Limits Fed’s Room to Maneuver

The Omicron variant of the coronavirus comes at a challenging moment for the Federal Reserve, as officials try to pivot from containing the pandemic’s economic fallout toward addressing worryingly persistent inflation. The central bank has spent the past two years trying to support a still-incomplete labor market recovery, keeping interest rates at rock-bottom and buying […]

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Pandemic-Era ‘Excess Savings’ Are Dwindling for Many

In a commentary published on a Federal Reserve Bank of New York blog in April, four economists argued that “although large by historical standards, the savings accumulated by U.S. households during the pandemic do not appear to be ‘excessive’ when set against the extraordinary need of many American families.” Millions of Americans could be buffeted […]

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November 2021 Jobs Report: A Gain of 210,000

Employers recorded the year’s weakest hiring in November, adding only 210,000 jobs on a seasonally adjusted basis, the Labor Department said Friday. Economists had expected the number to be above half a million for the second straight month. The shortfall was particularly stark given that the data was collected before the emergence of the Omicron […]

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Why the Fed Chair Won’t Call Inflation ‘Transitory’ Anymore

Jerome Powell, the Federal Reserve chair, picked an interesting time to banish “transitory” from his vocabulary. All year he has been describing the rise in inflation as transitory — five times in a single speech in August, for example. On Tuesday he publicly changed his mind, telling the Senate Banking Committee that it was “probably […]

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A Top Official Says the Fed Will ‘Grapple’ With a Faster Bond-Buying Taper

John C. Williams, president of the Federal Reserve Bank of New York, said the latest variant of the coronavirus could prolong the bottlenecks and shortages that have caused inflation to run hotter than expected, and is a risk Fed officials will assess as they “grapple” with how quickly to remove economic support. It is still […]

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A Top Official Says the Fed Will ‘Grapple’ With Faster Bond-Buying Taper

John C. Williams, president of the Federal Reserve Bank of New York, said the latest variant of the coronavirus could prolong the bottlenecks and shortages that have caused inflation to run hotter than expected, and is a risk Fed officials will assess as they “grapple” with how quickly to remove economic support. It is still […]

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Powell Says Fed Could Finish Bond-Buying Taper Early

Jerome H. Powell, the Federal Reserve chair, signaled on Tuesday that the central bank is growing more concerned about high — and stubborn — inflation, and could speed up its plan to withdraw economic support as it tries to ensure that rapid price gains do not become long-lasting. His comments, delivered during a Senate Banking […]

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Does Europe’s Lower Inflation Hold Lessons for America?

This morning Eurostat, the European statistical agency, announced its “flash” estimate of November inflation for the euro area. It came in well above expectations — a 4.9 percent rise in prices over the past year. Still, this was lower than U.S. inflation: In October our consumer prices were up 6.2 percent over the year. And […]

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Supply-Chain Kinks Force Small Manufacturers to Scramble

For example, when companies moved production from the United States to China in the past, they paid for the shift with the savings gained in going from a high-cost area to a cheaper locale. Doing the reverse might make sourcing and production easier, but there’s no cost savings to fund it. “We are not going […]

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Supply Chain Shortages Help a North Carolina Furniture Town

HICKORY, N.C. — Six months into the coronavirus pandemic, as millions of workers lost their jobs and companies fretted about their economic future, something unexpected happened at Hancock & Moore, a purveyor of custom-upholstered leather couches and chairs in this small North Carolina town. Orders began pouring in. Families stuck at home had decided to […]

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A Holiday Gift Guide to Beat Inflation

If groceries, gas or automobiles were any part of your budget this year, inflation has hit you hard. Now perhaps you want to keep the gift budget in check. Then again, maybe you haven’t seen your relatives in a long while, and you’d rather not be anything less than generous. So here’s a challenge — […]

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Inflation Worries Dominated the Federal Reserve’s Last Meeting

Worries about inflation dominated the Federal Reserve’s November policy meeting, with some policymakers suggesting that the central bank should move more quickly to reduce its bond-buying program in order to give it flexibility to raise interest rates sooner if necessary, minutes from the Fed’s November meeting showed. The Fed has been buying $120 billion in […]

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The Inflation Miscalculation Complicating Biden’s Agenda

WASHINGTON — President Biden’s top economists have worried from the beginning of his administration that rising inflation could hamstring the economy’s recovery from recession, along with his presidency. Last spring, Mr. Biden’s advisers made a forecasting error that helped turn their fears into reality, a calculation that spread to this week’s decision to renominate the […]

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Inflation Batters Pakistan and Puts Pressure on Imran Khan

Muhammad Nazir canceled his daughter’s wedding. He parks his motorcycle at home and walks to his shop. Many of his shelves are empty because he can’t afford to stock the same supply of candy, soft drinks and cookies that he once did. A growing number of his customers can’t buy his snacks anyway. The global […]

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How Softies Seized the Fed

Who should lead the Federal Reserve? President Biden faced a difficult choice. Should he reappoint Jay Powell, a monetary dove who believes that the current inflation spike is probably temporary but might revise his views in the light of evidence? Or should he nominate Lael Brainard, a monetary dove who believes that the current inflation […]

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Overheating the Economy Now Could Mean Trouble Later

Instead, Mr. Powell should immediately take tougher action to fight inflation. Rather than slowly reducing its purchases of mortgage-backed securities, given the white-hot housing market, the Fed should immediately stop buying them. It should aim to eliminate all additional asset purchases by the time Fed officials hold their March meeting, not June. In addition, the […]

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Biden Bets Big on Continuity at the Fed

In the end, President Biden bet that the leaders of the Federal Reserve could finish what they started. Jerome Powell, who will be reappointed Monday as head of the central bank, and Lael Brainard, a Fed governor newly nominated to be his No. 2, had steered the economy from the depths of the pandemic to […]

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Powell or Brainard? Why Biden’s Pick to Lead the Fed Matters Now

Amid price pressure, Republican attacks and voter angst, President Biden will soon reveal his choice to lead the Federal Reserve, the agency charged by Congress with a dual mandate to maximize employment with stable prices while maintaining a sound financial system. By most accounts, Mr. Biden is considering another four-year term for Republican lawyer Jerome […]

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How Higher Prices This Holiday Season Could Cost Democrats, Too

The president’s recent tour of ports, bridges and auto plants — which was meant to promote the infrastructure legislation — was overshadowed in part by inflation anxieties. As he test drove an electric Hummer at a General Motors plant in Detroit this week, his message of a future of zero-emission vehicles was eclipsed by a […]

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The Diminishing Democratic Majority

Last weekend I wrote about how the landscape of 2021 is suddenly letting Republicans play politics on “easy” mode, by giving them back the kind of issues that built Ronald Reagan’s majority in the 1970s and 1980 — rising inflation, rising violent crime, a Cold War rivalry (Chinese rather than Russian this time) and backlash […]

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Buy Stocks to Prosper. Buy Bonds to Sleep at Night.

The Fed has been cautious, announcing that it will begin tapering its bond purchases but promising to hold short-term interest rates low for a while. But it could be forced to act more rapidly if it deems inflation to have gotten out of control. Fed intervention set off the current bull market rally in March […]

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Inflation and Retirement: How to Protect Your Savings

“We did not invest all of Mom’s money in this product,” Ms. Cheng said. “We only invested a portion of her I.R.A. and her inherited I.R.A. We did this to address market risk, inflation risk and longevity.” (These additional contracts are often expensive, and additional features increase the cost of an annuity contract. The living […]

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Inflation Headlines Don’t Tell the Whole Story

Early this year some prominent economists warned that President Biden’s American Rescue Plan — the bill that sent out those $1,400 checks — might be inflationary. People like Larry Summers, who was Barack Obama’s top economist, and Olivier Blanchard, a former chief economist of the International Monetary Fund, aren’t unthinking deficit hawks. On the contrary, […]

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Joe Biden’s Infrastructure Bill Is a Big Success

Joe Biden came to the White House at a pivotal moment in American history. We had become a country dividing into two nations, one highly educated and affluent and the other left behind. The economic gaps further inflamed cultural and social gaps, creating an atmosphere of intense polarization, cultural hostility, alienation, bitterness and resentment. As […]

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Biden’s Infrastructure Win Deserves Recognition

There were many priceless moments in Caity Weaver’s profile in The Times of Sam Asghari, a.k.a. Mr. Britney Spears, and while most can be wholly appreciated only in the context of the entire article, a few sentences do just fine on their own. Like this one, about two of Asghari’s intrusive and fidgety handlers: “If […]

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What’s Happening With the U.S. Economy?

Ben Casselman contributed reporting. The Daily is made by Lisa Tobin, Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Larissa Anderson, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Austin Mitchell, Neena Pathak, Dan Powell, Dave Shaw, […]

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The Build Back Better Plan and American Economic Policy

Constrained supply ultimately results when providers use their political power to insulate themselves from the market forces that drive innovation and cost reductions in the long run. A family physician can see only one patient at a time, for example, but for every doctor there are many nurse practitioners, physician assistants and other practitioners who […]

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As Gas Prices Surge, Biden Tells F.T.C. to Investigate

WASHINGTON — President Biden asked the Federal Trade Commission on Wednesday to consider whether “illegal conduct” by large oil and gas companies is pushing up gasoline prices for American consumers, the latest effort by the administration to target concentration in the energy industry in a bid to bring down prices at the pump. The move […]

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Retail Sales Jumped 1.7 Percent in October

“Everybody believed during 2021 that we’d see a significant shift away from goods back to services as the economic environment opened up as we got our arms around the pandemic,” Craig Menear, Home Depot’s chief executive, told analysts after the company reported its earnings Tuesday. “Clearly, we have not seen that.” Strong October sales may […]

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Inflation Will Hurt Biden’s Spending Plan

Focused on the demand side, even most pessimists — me included — missed a pressing problem. Supply-chain bottlenecks have led to shortages of many goods, a crisis that has been exacerbated by the reluctance of Americans to return to work. The worker shortage has also hurt the service sector. Many restaurants, for example, remain closed […]

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How America’s Pandemic Economic Response Fought the Last War

It was the early 2010s. The global financial crisis had become the stuff of history books, and the recession it had caused was long over. But the United States economy was still haunted by a series of chronic, interrelated problems: too little spending by consumers and businesses; too few jobs; and too-low inflation. The result […]

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